Hi Guys,
I believe I have a similar issue to you two which I've posted detailed info about here: http://wordpress.org/support/topic/404-when-clicking-products-in-categories-permalinks
I think the issue lies with having a "Product Permalink Base" and a "Product Category Base" which includes the name of the Shop Page.
Hopefully we can find a solution to this: are either of you using the latest 2.0.5 version of Woocommerce?